Fast Focus: 'Should schools collect impact fees on new housing?' City, schools losing money

April 27, 2014 

A $4,700 school impact fee is being charged for on each single family home building permit issued in Pasco since April of 2012. This has stifled Pasco's growth and costs the Pasco School District thousands of dollars in lost property tax revenue every year.

According to information from the Tri-City Home Builders Association, Pasco issued 483 single family home building permits in 2011, 313 in 2012 and 203 in 2013. That's 280 fewer permits in 2013 than 2011, a drop of about 60 percent. For reference, Kennewick issued 283 permits in 2011 and 277 in 2013. That is 5 fewer and a drop of less than 2 percent. Pasco has far more land available for development than Kennewick. The imposition of the school impact fee is the single variable that would have caused the decline in home building in Pasco.

I have a modest home in Pasco valued at $143,900 by the tax assessor. My latest property tax assessment shows $1,339.03 going to schools. Assuming my home is average for Pasco new construction, the school district is losing 280 x $1,339 or $374,000 per year in revenue because of homes not built. The revenue from the school impact fee of 203 x $4,700 is $954,000. That covers the taxes lost (from not building 280 homes) for two and a half years. After that, assuming these trends continue at present rates, for each year the school impact fee is in place, the school district will have a net loss of $374,000 due to reduced home building for that year. This quickly adds up. After fifteen years, the annual loss to the school district will exceed $4,000,000.

Another line item on my property tax statement shows that the city gets $288.02 each year. So the city is losing $80,600 in property tax revenue each year because of the reduction in the number of taxable homes built. I expect that lower sales tax, sewer and water billings and franchise fees among others adds significantly to this loss.

The school impact fee should be eliminated.


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